Do you remember how you chose your CPA? What characteristics you were looking for? Do you know as much about your CPA as you do your finances, or is it the reverse and you know more about your CPA than you do your finances? Well, believe it or not your CPA, accounting information, and your resulting financial reports have significant commonalities. Let’s start by defining each component.
First, we have the definition of accounting as the assembling of a company’s financial transactions. The information is required to be based on qualitative characteristics that are reliable and free from bias or opinions from the major company stakeholders and the professional accountant (CPA). This then becomes the information on which stakeholders in the company make viable business decisions.
Secondly, the accounting information must be relevant. Simply stated this means that all information must meet the criteria of being current and timely. Outdated information is useless and would only lend itself to misleading stakeholder decision making.
Next, accounting information requires consistency. Consistency is the cornerstone to visibility of a company’s accounting practices; whether it is in how accounting information is gathered, where it is gathered from, and how it is maintained. These practices retain consistency through a natural occurring cycle of repetitiveness.
Lastly, we have reached accounting information comparability. This is the ability to compare one company’s accounting information to another company’s information. This is achieved through how a company presents its information on reports and statement. This helps to ensure that no matter what company you are researching or comparing your own information to, it is easily understood and the formats lend themselves to comparative analysis.
Now we take all this information and we overlay it onto the characteristics of your CPA.
- You want a CPA who sets their own internal and external biases and opinions aside
- They have an inner drive to continue growing, expanding, updating their accounting and financial acumen thus remaining relevant in every sense of the word as it applies in this context
- They are consistent in the way in which they work with you
- in the presentation of your documentation
- in the manner in which they personally convey that information as they walk through it with you
- All of this culminates with your CPAs ability to take you, utilizing what has been prepared and delivered to you, through a comparison of other companies and easily show you where you stand in that comparison.
Basically, your accounting information and your CPA hold the same characteristics that ultimately lead to your financial success with you having all the information you need to make sound business decisions.
Together, you and your CPA are partners and your ability to be a team is invaluable to how you both move forward as your company’s sustainability evolves and strengthens.
Remember, the qualitative commonalities between accounting and your CPA is: